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My Charting Blog

It is interesting that I start off this Blog when the Singapore Stock Market is heading south. However, this makes it more interesting for me to write on as the market turned volatile. My interest is Technical Analysis, TA for short. I love to look at charts and predicting where they are heading. This blog is or me to record my thoughts on the market. The articles on this blog are based solely on my personal opinion on the charts that I read and readers should not take it as absolute.

8/31/2009

Star on the evening sky of New Toyo

My last romance with New Toyo was not that great, I exit base on a possible Tri-star formation, the counter then start gliding up after the formation, which meant that my judgement on the counter was wrong. It prompted me to enter again at a slightly higher cost, this time I thought I was on the right track. The counter did move up to a high of 0.24 before retreating to 0.235 last Friday.



Fig 1 New Toyo Daily Chart

I was not very happy though, because the counter has now formed a Doji Star with gap up, it is more convincing than the Tri-star formation. The only hopeful thing ( the one thing I have learned that I should not do (from the book "the Way of the Turtle")) is that it breaks upward. Unfortunately, it did not happened, the counter opened gapped down, I exited because it triggered my stop loss. It went futher down by another 0.005 and closed at 0.225. This confirms the formation and now officially an evening star.

The indicators on daily basis further supports its downward slide. Both RSI and Stochastic are reversing downward. The likely support for this counter would be 0.21.

So how much am I right this time? I am not sure, which is why this is on the record in this blog, and we shall see.......

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STI bull coming to an end?

When I restart my chart reading "career", I wanted to make some changes to my techniques and focus on weekly more to look at a bigger picture. I do not want to focus too much on details because I have found that I would be looking at the tree and miss the forest. As time progresses it seems like the movements is leading me back to the daily charts, because no matter what, I need to monitor the reversal. The thing is that if there are changes coming, it starts in the daily chart.



Fig 1 STI Daily chart

The recent movement of STI has prompted me for a close monitoring as I have blogged earlier. I was relieved that the confirmation of the Doji star did not come last Thursday. However, probably these stars are omen in a way because by today there is a new formation, Engulf. This is right after another Doji Star followed by a 75 points bar on STI. Okay, all is not yet lost because Engulf still requires a confirmation which is tomorrow.

The RSI and Stochastic on both daily and weekly though is not helping, they are very persuasive to ask STI to go down. This will mean that the fate of STI is very much like HSI, testing its trend support.

The trend support on weekly basis is still at 2,576 while a possible resistance at 2,692. on daily basis the trend support remains at 2,581, coinciding with the 21 days moving average. It is also possible that STI is working on a triangle formation? Like my teacher said, it is like a flower slowly unfolding itself in front of you. So? Wait and see......

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Hang Seng Index



Fig 1 Hang Seng Index weekly chart

I have earlier this month (its still August!) blogged about Hang Seng Index (HSI) and I mentioned of a fear for its reversal. It seems like this is coming true now.

HSI has since retreated from its peak and it is now testing its trend support. Base on the RSI and Stochastic indicator, there is a chance that this support would not hold. If HSI breaks this line, we are likely to see another winter come early. The trend support for HSI is 19,282, 21 weeks moving average support at 18,500 while 89 weeks is 18437.

8/26/2009

The Hang Man.....

Okay, tonight writing is a short one, partly because I have dead tired.

I was rather bullish earlier on STI because I thought that "well, the correction should be over and it continues on its journey." Just when I feel a little better, this happens on STI today.



Fig 1 STI Daily chart

The latest bar signifies a dragonfly Doji, more over it gaps up creating a hanging man pattern. Certainly the name does not sound good. The Dragonfly Doji itself most of the time is a strong indication of changing trend, worse still a hanging man. There is still a need for confirmation though. Should tomorrow opens lower and not recovering, we should be seeing some more bearish tendency days ahead (if not weeks).

Looking at the pattern, it might as well be forming the right shoulder of reverse head and shoulder formation, that is if my original prediction of 2,809 still holds. otherwise, the next support likely to be 2,417. That will really be bad because it will have broken the longer term trend line, meaning BEAR IS IN!!!!!

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8/25/2009

The USD retreats?

When I first learned technical analysis, I was told by my teacher that the upper time frame governs the lower time frame. That is the indication from a monthly chart is more significant than the weekly, subsequently the daily chart. However, some times the conflicting signals makes it confusing for me to determine whether a chart is heading north or south.

USD vs SGD chart for instance is giving conflicting account. The monthly chart indicates a bear tendency, that is USD is going to move lower against SGD. The weekly chart on the other hand has indicators turning positive. The pattern from the weekly chart further confuses me with 2 possible formations, a rectangle (target 13962) or double bottom ( a small one with target 15049 ).

One thing about charts of higher time frame is that it omits a lot of details and somehow provide a less nisy pictures. At the same time, certain minor details are being erased. Thus it is still important to look back at lower time frame to see if anything has been missed.



Fig 1 USD vs SGD Daily chart

While I glanced through the daily chart in Fig 1. I noted a up-ward wedge formation with downward objective of 14187). Further to that, another possible formation of a swing move would propagate the Dollar to about 14152. Thus far, I have not seen any up-ward indication, which probably due to my perceiver personality (problem with details). So for the time being, the daily chart is in-line with the monthly chart.

The indicators on the daily charts are in the process of moving lower, although with indications of reversing. They are both (RSI and Stochastic) mid-way heading south. So there is a tendency that the downtrend would be continuing with minor up-ward trend.

8/24/2009

SSEC reversal

It was a few weeks ago that I first chance upon SSEC due to the Forum "hot topic". I have last predicted a fall of maximum of around 500 from its top of probably 3,478
to a level of 2,939. This is base onFibonacci calculation of a 4th wave retracement which is 0.382 of wave 1 to 3. It went further than my expectation to a level of 2,761.



Fig 1 SSEC Weekly Chart

At the end of last week, SSEC seems to have ended its downward trend. In fact it created a hammer after a gap down. This is a good sign because it signifies a reversal. However, we should not be too happy yet because we still need a confirmation, which is this week.

The signs are good today with opening higher thanthe previous closing. Yet, we have to wait till the end of the week for a full confirmation. Should it be a long candle bar, if that is so, the hammer would then be a morning star, which gives much confirmation that SSEC would be up the next week.

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8/20/2009

Creative.....

I was watching Creative today while at work (my bosses better not read this). While my chart reading last night gave me some indications on condition for entry and stop loss. However, its move today gave me a headache because it first hit my stop loss level then hit the entry signal. So I am now having a conflict on whether the stock can be entered.



Fig 1 Creative Daily chart

Last night, Creative seems to be on a verge of completing a downward wedge with an objective of around SGD6.80. So a condition of entry was placed at the point of break through of SGD5.70, at the same time, a stop loss was placed at SGD5.50 since the previous low was SGD5.56. This seems safe enough.

Ironically, it went all the way to SGD5.50 and then SGD5.75. At the end of the day, this chip has done a spinning top, indicating an uncertainty on its direction. I think a parts integration process (NLP) is in order. The support on daily basis is SGD5.46 base on 21 days MA. Both RSI and Stochastic at bottom but no indication of entry yet.



Fig 2. Creative Weekly Chart

When I read the weekly chart however, there is a strong suggestion that I should still stay out of this stock. a Doji star confirmation still fresh at hand with support on declines on both RSI and Stochastic. End of the day, I have to make a decision to sit on the fence for this stock, regardless if it goes up or down next.

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8/18/2009

Dow Jones Industry Average (DJIA) re-visit

I was browsing through the CNA forum after closing and noted a prediction that DJIA will bleed tonight (Singapore is night when DJIA opens), so it raised my eyebrow that I have to take a look.



Fig 1 DJIA Weekly chart

Seeing the weekly chart, I think DJIA should be in the red for quite a while, both RSI and Stochastic is in agreement that its time for DJIA to correct itself. Probably the good thing is that the Gann Gridline for DJIA is much more gentle, thus there is a support around 8,700 region. This is re-enforced by a minor trendline.

As for Candle Stick pattern, its really difficult to tell. I can't really say that its an evening star because there is no gap, neither can it be a three inside down pattern because the harami is incomplete (day 2 partially pertuding out of day 1). Nevertheless, it is cramped between 2 bearish patterns, so it should still be down for me.

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Prediction on STI Daily

I am relatively free from the stock market today since I have sold my last stock yesterday. Even so, I spied on the few stocks that I have dumped. My instinct is at least good for 1 day prediction.

While my stocks went lower, the index did a partial retracement of 20 points at the end of the day, penetrating the previous low. The question is whether it would be good enough to qualify for a reversal?



Fig 1 STI Daily

Fig 1 shows a thrusting pattern on Candle Stick, right after an evening star. This pattern is normally an indication of continuation rather than reversal, so tomorrow's performance will be a crucial confirmation, however, judging from its earlier Evening Star pattern, it is likely to continue its way down.

There are a few levels of support for STI on daily structure. Its trend support is 2,508, while the 21 days Moving Average at 2,552. At present the Stochastic is reversing down, possibly a second bottom or creating a divergence. RSI on the other hand is only half way down, I am not too sure of its direction because it seems to be congesting.



Fig 2 STI weekly chart

Since the lower time frame is governed by the higher time frame, it is always a requirement to at least check one time frame higher. On the weekly STI, its upward thrust is limited by the Gann Fan resistance at 2,604 while its trend support is only 2,485. Seems to me that position of STI is rather shaky at the moment. Its RSI and Stochastic are already trending downward. So does this mean a reversal downward?

The only savior so far as I guess would be the three white soldiers formation during its bull run, the formation is an indication of bull tendency. It is rarely that the three white soldiers would fail ( it didn't on Tiong Woon ). So in case of STI, I would still consider this as a correction. Afterall, no matter how I calculate, the Fibinacci number is still pointing to 2,809 for STI.

Having said that, I must still respect the market, if the market run against me, it only means that I am wrong, thus its back to the drawing board for me.

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8/17/2009

Tri-Star Formation on New Toyo

I have been using Candle Stick more often lately, this is probably due to my hessitation in Creative earlier. Yes, I did not seel the chip even after a Gravestone Doji creating a shooting star (with confirmation). It made me lose my chance of selling at a higher profit. Nevertheless, there was profit.

On my earlier essay, I mentioned of a stock with a pattern that I did not like, and I promised that I would share. It is New Toyo.



Fig 1 New Toyo Daily chart

This counter is promising. It has created a triangle bottom and poised to move north ward with minimum target of about SGD0.27-0.28. I caught this stock late and was in fact late in entering this counter, nevertheless there is still some way to go.

While it has potential, its last 3 days move has been a waring sign. In fact by the end of today, it has completed a rare Tri-Star pattern. By right there is suppose to be some gap between each doji, the gap seen here is minimum, but the three Doji seems to be good enough warning for me. Of course the pattern will still need a confirmation and I did set my stop loss at SGD0.19. However, it si better to be safe especially when market is uncertain.

Moreover, the indicators are showing signs of fatique and starts pointing downward. This is again another tell tale sign of exiting this stock. I could be wrong but I have decided to still follow my instinct this round.

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Tuning to the market

My boss and my colleague both happened to be on leave today and my Engineers are on auto-pilot. They are most of the time because they know what to do. As for me, I have this meeting with my colleagues overseas for more than 2 hours in the afternoon and contemplating what to do in the morning. As I looked at the Excel sheets on components list, I really feel disgusted because there is no standardization of the part number naming process.

While I feel lousy on job, the stock market gives me a pleasant distraction. For some reason I have been liquidating my portfolio, I liquidated Creative ( not at the highest but with a small profit) 2 weeks ago while Tiong Woon end last week when it reached my objective. By today I was left with 2, they failed to move last week. For some reason, I did not like the moves on these 2 stocks lately. One has broken the support line while the other seems to be creating a Tri-star pattern. I liquidated both stocks in the morning, one of them right after I have paid my broker.

It was not until 4PM that when I have my very short coffee break that I get to know how terrible the day has been. STI dropped 78 points! I was like wow! As for the 2 stocks that I liquidated today, one slided further down and reached my stop loss level while the other completing the final part of the Tri-star pattern (well, still need a confirmation tomorrow). I will share about this stock later.



Fig 1 STI Weekly chart

Fig 1 is the STI weekly chart, just for the benefit to those charts fanatics like me. I assume those people at CNA forum will be yelling blood, sea of red, dooms day stuffs there and prophecy of market crash. Indeed SSEC has also witness a tremendeous drop today and went beyond my second predicted 500 points drop(?).

Still I do not see the devastation. It is still a correction. Now the only thing I can't really figure out is the wave count(功力不够). It seems like this is the completion of one bul run, I have a 5-wave count completion. At the same time, the fibnacci still pointing me to 3809 for 5th wave completion.

There is a chance that the wave have not yet completed, but it has to depend on next week and in hope that this week is range bound between this 78 points. I next week is a bar up, it would create a "rising three method" base on Candle stick. With the Three white soldiers done during the last few weeks there should still be some room to move still.

What I can see is a double top on RSI. I did recall my teacher taught me about RSI able to create reversal pattern, he only mentioned about Head & Shoulder but not double top. RSI is now at neckline below the 80% mark. I won't have much hope for a reversal unless my expectation for next week happens, which is likely to cause RSI to reverse up but would result in a divergence.

On a side line, I do have a threory about why the market falls today. I have long believe that the best indicator of market is none other than our Prime Minister and Minister Mentor. The last round MM Lee mentioned that the market supported the election result, it led other indices for a South Pole exploration. While every time our PM Lee said that market is bad, the market rallied, when ever he said the recession is over, market again headed for the South Pole.During March time this year, PM Lee mentioned a long way ahead before recovery, and the market started to rally.

This time round is no exception, The market turned South on the week after National Day Rally. If the market experts are already so bad in predicting the market, would our ministers do a better job? Of course, all these are just my own observation and should only take as a reference and not absolute. I am thinking, may be just for Singapore sake, PM Lee continue to be pessimistic about Singapore Market? Then probably STI will start climbing Mount Everest?

8/13/2009

Nikkei 225

I have been hessitated to write about Nikkei 225, for one Nikkei has been on a down trend since 1988 and I do not think I am buying any stocks from Japan ( no account there at all ). Today however, I read news about Nikkei going up, and I did see a gap up a few weeks ago. So may be it worth a look.



Fig. 1 Nikkei 225 weekly chart

Nikkei has been going up but it is now quite exhausted. Base on candlesticks, it has created 2 patterns,an advance block and eventually a Doji Star in creation. It is highly possible that Nikkei is reversing towards its neckline at least ( a double bottom was completed, although it is quite small ), target would probably be 9,360.

8/12/2009

HSI Weekly - an indication of reversal

My friend from Hong Kong has been pestering me to take a look at Hong Kong Stocks. It is quite interesting that all its counters are in numbers rather than names. This make it even more like a perfect competition. On the hind side, it gives a feeling of lacking in personality, making it less interesting.

Anyway, what I have got is HSI on my data base. I looked at it and it does not look good.



Fig 1 HSI Weekly chart

The HSI has been climbing to new highs since beginning of this year and it seems to be unstoppable. This is where the risk is, when people are thinking that it will never fall.The recent weeks move by HSI seems to be losing momentum. In fact, base on its candle sticks pattern, the chart has completed an Advance Block indicating reversal.This week it seems, HSI bar is red, so far.

Still I have to bare in mind that its the middle of the week and there are 2 more days to go, things change quickly in 2 days. My last look on some indices indicated either advance block or deliberation last week, yet this week they broke the pattern.*sigh* there are still imperfection in me........

Money, money , money

I have recently bought a DVD (legal version) on Mama Mia the movie and I enjoyed it so much that I have watched it 10 times! It is not the ABBA songs alone that attract me, the movie is also about mother and child relationship, it is also about love, how there is a closure to a 20 years relationship. The movie is not at all boring, in fact part of it is quite a funny comedy. There is this part where Meryl Streep sang "Money, Money, Money" which reminds me that this is what we are doing all the time.

Speaking of money, I was looking at a few Forex as compared to SGD. Below are the charts:



Fig 1 AUD Vs SGD Weekly



Fig 2 CAD Vs SGD Weekly



Fig 3 EUD Vs SGD Weekly



Fig 4 NZD Vs SGD Weekly



Fig 5 USD Vs SGD Weekly

The few currencies that I saw (with exception of USD)have actually used around 2 years for a top formation and broken the necklines. Most of them completed the double top. AUD for instance even met its minimum objective and went back to break the neckline up-ward. EUD on the other touched the neckline and back off, still contemplating when it will cross that very line. Canadian Dollars have not really reached its objective but went back and broke the neckline, this is similar as NZD which barely broke the neck line.

However, as I read the chart today, it seems to me that all these currencies are at exhaustion. AUD for instance did a Doji Star followed by a Marubozu. NZD done a bearish meeting lines. CAD confirmed Engulf for bearish indication. And EUD, er...EUD actually did not indicate any pattern that I know of yet. However, the other indicators such as Stochastic and RSI so far comply with the chart pattern, all indicating bearish tendency.

As I mentioned earlier on, USD was an exception to SGD. It was already down last year and presently its RSI and Stochastic indicators are at the bottom poising for an upward movement. Seems like USD might be trending up while others moving south.

However, I hae to bare in mind that this is the middle of the week and I am predicting base on an unfinished candle stick.

8/03/2009

Unifiber

In my last entry on this counter, I was in position at SGD0.07 with objective of possible 0.15 base on a flag move. I was hopeful on this stock. That is until Firday.

While monitoring the stock, I check on the Time and Sales record. There are many small players in buying up this stock. Many were as high as 1,000,000 units. However, a few trades un-nerved me. These stocks are distributing at volume of 20,000,000 to 40,000,000. The number of sellers are not many with only 1 or 2 per day, but it seems like someone know something and is dumping the stocks.

I could be wrong on this and this is only an assumption base on my own opinion. It is enough to ask for my exit, which I did.

Is it a wise choice? I am not sure, but the stock did touch a new low of 0.06 today with even higher volume. It is possible that I have error in reading my chart. The most important thing is that I have to admit that I can be wrong. Afterall, the charts read both ways.